This morning I’m recommending a bullish trade on JD.com, Inc. (NASDAQ:JD), the online direct sales company based in China.

Markets have been buoyed recently following the announcement that the tariffs on Chinese goods due to be imposed on March 2 would be postponed. It now looks like the discussions between the U.S. and China will continue at least until the end of March.

Hopes for a positive resolution have given traders a reason to keep bidding up the market, but as I’ve said before, I’m not sure anything substantial is going to come out of the negotiations, even if some sort of deal is announced.

Regardless, we can make a play on the optimism about the trade deal in the near term, and JD is a good target for a bullish position.

JD Beat Fourth-Quarter Earnings Expectations

JD reported earnings yesterday, and it did very well. The company reported non-GAAP earnings per share of $0.07, beating expectations.

Though the company did report a net loss of $698.82 million, which was an increase from the same time last year, the stock didn’t suffer.

I think there is enough positive sentiment around the U.S.-China trade situation to push JD higher on news of strong earnings, even with an increased net loss, and the technical picture is just as appealing.

Support at 50-Day Moving Average

JD broke above its 50-day moving average (MA) at the start of 2019, and in January, that MA acted as support several times. Now JD is bumping up against its 200-day MA. I think the strong earnings report could push JD above its 200-day MA, and now is the time to get in.

Daily Chart of JD.com, Inc. (JD) — Chart Source: TradingView

JD has been heading higher since the end of December, and there is not much overhead resistance in sight until the low to mid-$30 range. That makes me more confident in its gradual recovery. Therefore, I’m recommending a bullish call option this morning.

Buy to open the JD.com, Inc. (JD) May 17th $29 Calls (JD190517C00029000) at $1.70 or lower.

InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.